CinemaNow appeases studios by locating Web surfers

The online movie service hooks up with a company that's able to track Web surfers based on where they live--a move aimed at preserving territorial-based controls of movie licenses.

3 January 200212:43 am GMT

Online movie service CinemaNow on Monday hooked up with a software company that is able to track Web surfers based on where they
live--a move aimed at preserving territorial-based controls of movie licenses.

Digital Envoy, with its
NetAcuity technology, says it can block audiences with 99 percent accuracy,
helping companies such as CinemaNow make good on its film distribution promises.

"One of the main things that's holding back movie studios from going online is this territorial management issue," said Bruce Eisen, executive vice
president of CinemaNow.

The partnership underscores the ongoing struggle between Hollywood and the
Internet's wide audience. Movie studios have been apprehensive about
embracing the Net, fearing that copyrighted materials could be pirated and
that territorially-based distribution rights could be too
easily broken.

Last year, the motion picture industry successfully shuttered iCraveTV, a small, Canadian Web company that broadcast TV programming over the
Internet without first securing permission from the studios. The industry
also cracked down on RecordTV, a company that records TV shows and plays them back on the Web, saying that
the activity amounted to a copyright violation.

In August, Gaijin a Go Go Cafe and Zero One Design, two tiny outfits that
streamed Japanese commercials featuring big Hollywood stars, were warned about distributing creative
work outside the approved distribution circuit.

CinemaNow, which launched its
video-on-demand service in November, wanted to avoid the kind of trouble
that iCraveTV and RecordTV attracted. The company sought help from Digital Envoy when a Net distribution of the science fiction thriller, "Prototype,"
drew the wrath of Hollywood lawyers.

Turns out CinemaNow had inadvertently violated conditions of the licensing agreement because it could not, with near 100 percent accuracy, block
audiences from outside of the United States, where it did not have permission to distribute.

With NetAcuity, Digital Envoy says it can detect the location of an
estimated 4.2 billion Internet addresses.

There may be some loopholes, however.

The 26 million people that use America Online, the Internet service provider from AOL Time Warner, all have IP (Internet Protocol) addresses in
Virginia, where AOL is based. For example, a person living in France using
AOL services is detected as someone living in the United States. Digital
Envoy also can't detect the location of consumers who place filters on
their computers that make them anonymous. Such filters conceal personal
identifying information such as age, sex and income; they also hide IP
addresses.

In addition, privacy advocates have been looking at the ability of companies to trace a Net user to a physical location. As Web surfers become
increasingly worried that the Internet will open dossiers to anyone for a price, concerns have been raised that technology capable of revealing IP
addresses could in turn make street addresses and other personal information available.